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Northern Rock

I was going to spend a grand on premium bonds this month. Would it be better invested in Northern Rock, bearing in mind I may shortly have to subsist on my pension?
chrislane how about National Savings income bonds ? thats what I have interest is paid monthly
 
Thanks for the informative reply Mel – sorry for the delay in replying.
Like you, I’m a bit perplexed with the statement that the BOE helped blocked the take-over of NR.
It all makes me very concerned that we aren’t being told the whole truth as & when its known.
It now transpires that NR have been holding emergency talks for nearly six weeks without shareholders/investors being aware of the growing problem.

I see the shareprice is down about another 40% today – hope not too many private investors didn’t take any notice of the ‘don’t panic’ brigade -not that selling the shares or withdrawing savings is a panic gesture of course, it’s a considered & sensible way of managing finances.

As a matter of interest Mel, have you any idea how long investors would have to wait before having their savings (or proportion of savings) returned to them in the event of a bank folding. Many people who pay for their retirement/care homes from their savings would be seriously affected and might find themselves being transferred out of the homes because they couldn’t access their savings to pay the fees.
 
... hope not too many private investors didn’t take any notice of the ‘don’t panic’ brigade -not that selling the shares or withdrawing savings is a panic gesture of course, it’s a considered & sensible way of managing finances. ...

Nonsense, the withdrawls are a panic measure, and the main problem Northern Rock faces. :hrmph:
 
chrislane how about National Savings income bonds ? thats what I have interest is paid monthly

Thanks miffie. When I have to retire I might just cash in all my premium bonds and put the proceeds into NS income bonds.
 
As a matter of interest Mel, have you any idea how long investors would have to wait before having their savings (or proportion of savings) returned to them in the event of a bank folding.

I don't, but I think someone suggested to me at the time mine had problems that if it came to that, it could take 2 years! I think the bank may have to be fully wound up before compensation to make good any shortfall in its assets can be assessed. Even if that's correct, I suppose it is possible they'd pay out a proportion in the meantime :shrug:.

If I had savings in the NR I still wouldn't be joining the queues. Although I'd be anxious if I owned NR shares bought before this...
 
Nonsense, the withdrawls are a panic measure, and the main problem Northern Rock faces
Not one person I know has been panicked into withdrawing. Each has made a considered judgement into withdrawing their funds because there is nothing to gain by staying with NR and they are no longer reliant or a short term gesture by the BOE/government which if and when withdrawn will mean its too late to do much about.
You may not choose to believe me and instead be sucked in by the media headlines of 'Panic Grips Northern Rock Savers' - but there you go.

There are two main problems NR face, one being the run on its savings and the other being that it relies upon a continous credit line to remain in operation. That credit line is now indefinatly withdrawn, so what can it do when the short term measure by the BOE to provide a credit line comes to an end?
Perhaps you fail to realise this is a prime concern amongst savers - as is the genuine level of distrust & uncertainity surrunding the circumstances.
If you were willing to gamble a few hundred thou £ by doing nothing and leave it in a company that no other bank will lend to and might soon only be able to trade on a day to day basis because of a tempory life line -well thats up to you, but thousands aren't and for good reason.
 
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Thanks again for your reply Mel
Two years to wait - and no interest I take it? ouch.

Just for a bit of fun, how low would you like to see the share price drop before you might seriously consider a punt?
I can understand you not wanting to join the queues at NR for your £5 investment :)
 
Something Positive At Last From Darling

News from Reuters:
LONDON, Sept 17 (Reuters) - Britain will guarantee all existing deposits at embattled mortgage bank Northern Rock (NRK.L: Quote, Profile , Research), finance minister Alistair Darling said on Monday.

Customers of the bank have rushed to withdraw money from their accounts after it sought emergency help from the Bank of England on Friday as fears grow that a global credit crunch could develop into a banking crisis.


"Should it be necessary, we, with the Bank of England, would put in place arrangements that would guarantee all the existing deposits in Northern Rock during the current instability," he said in a statement.

"This means that people can continue to take their money out of Northern Rock but if they choose to leave their money in Northern Rock it will be guaranteed safe and secure."

He said he had taken the decision "in the current market circumstances and because of the importance I place on maintaining a stable banking system and public confidence in it."

 
I read elsewhere that other 'big name banks' have also borrowed from the BoEngland lately.

I wonder why the media picked on Northern Rock? :hrmph:


Mo
 
I was awarded 500 shares in NR when they converted. Still have them. A few months ago, they were worth over £12.00 per share. Now, about £2.50. Not worth selling. The market hysteria over a bank with over £112 billion in assets is simply barmy. But that is the market. Not the slightest hint of rationality.
 
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You may not choose to believe me and instead be sucked in by the media headlines of 'Panic Grips Northern Rock Savers' - but there you go. ...

You're right, I don't believe your explanation or your attempt to imply Northern Rock was at risk. Northern Rock was effectively sound the minds of the "panickers" were not. :shrug:

Even with the government guarantee, which must make NR the safest commercial bank in the UK, there are still idiotic sheeple queueing up to withdraw their money this morning. :hrmph:
 
Even with the government guarantee, which must make NR the safest commercial bank in the UK
Not really Bob, the guarantee applies to all solvent banks, therefore it does not make the NR the safest UK bank.

I don't believe your explanation...
I shan't be losing any sleep over your disbelief - at least we agree on one thing :)

there are still idiotic sheeple queueing up to withdraw their money this morning.
Thats the trouble with a new labour government that has a history of untruths. Even when they give a guarantee, the public still doesn't believe them - This habit of not believing seems to be catching doesn't it :)
 
Not really Bob, the guarantee applies to all solvent banks, therefore it does not make the NR the safest UK bank.

Yes, I missed the extension to other banks (though full deposit insurance is a temporary measure). Either way there is no need for anyone to beat on the doors of their local NR branch. :hrmph:
 
..there is no need for anyone to beat on the doors of their local NR branch.
I'm not sure if you're referring to the customers trying to get in or the over-worked & beleaguered staff trying to get out - or maybe both :)
 
Thanks again for your reply Mel
Two years to wait - and no interest I take it? ouch.

Just for a bit of fun, how low would you like to see the share price drop before you might seriously consider a punt?
I can understand you not wanting to join the queues at NR for your £5 investment :)

Looks like we should have bought some shares yesterday :laugh:

I think I'd look at some of the other banks, eg the Alliance & Leicester look good value for a long term investment.

It is true I don't have any savings in NR, but had my life savings been in it I wouldn't have wasted my time drawing it out. Peoples saving in the NR have never looked to be at risk, there's probably more chance of being mugged on the way home from taking the money out.:rolleyes:
 
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Sorry I have not replied since my first post, my line has been out and BT refused to believe there was a problem "Our tests show nothing.."

NR Is the safest bank now IF you can believe the Government, who do not have a very good record on keeping promises, they promised to bail out pensioners who lost everything in the last banking scandal then weaselled out of it.
"Our Glorious Leader" announced that "all" the money currently in a NR account would be protected by a Government guarantee, not just the first £32,000 that is normal, BUT if you have withdrawn that money and now put it back, or add funds it will not be protected because he has the excuse of the word "currently"; by the time he said that 1/2 the money invested had already been withdrawn.

Not that I am a cynic and disbelieve the Government, honest!! ( keeps fingers firmly crossed behind back).
 
You’re right about buying the shares Mel, there’s been lots of buys & the price has rebounded somewhat.
So now we know that the real reason that NR customers besieged their local branches & withdrew so much of their savings was so that it would drive the share price down & they could purchase cheap shares at yesterdays knock down price !!!
What a shrewd investment strategy that was on their part & just like I said all along it had nothing to do with panicking whatsoever ;)

Capt Cretin,
Recalling your previous message, I saw mention the other day that Barclays has borrowed £1.6 billion overnight from the BOE – what the hell goes on there, an overnight loan?
Good point you make about only current savings are being underwritten – as well as having total trust in HMG statements (or not!)
 
Nice Little Story In The Online Mirror

Morally bankrupt lot run by total bankers
Sue Carroll 19/09/2007
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It's a mind-boggling measure of how little trust the public has in banks and government that, after both issued Corporal Jones-style instructions not to panic over Northern Rock's financial hiccup, customers reached for the parachutes.

Thousands have spent the tail end of summer in queues moving at a snail's pace to retrieve their savings. I don't blame them. If a politician says it's going to be a nice day, the natural instinct is to grab an umbrella.

As for chief executive Adam Applegarth - before this weekend did anyone have a clue who he is or what he looked like?

Now we know he's a sharp-suited, follically challenged high-flyer on £1.4million per annum with a penchant for Aston Martins and a £2.5m pad in Northumberland. (You could get an entire street in the North East for half that so it must be some gaff).
Actually, does anyone know their bank manager these days?

Chancellor Alistair Darling and Mr Applegarth have doubtless been crushed by the non-stop run on Northern Rock, despite their assurances the vaults are bomb-proof, but what they don't get is that this is the price you pay for impersonal banking.

Only the vastly rich are favoured with a Rolls-Royce customer service, while the rest of us - and it's the little people who fill the coffers - barely warrant the offer of a cup of tea from the office machine.

I can distinctly remember chats with my ex-bank manager, the long-suffering Mr Middleton of NatWest, who aged visibly after our meetings.

"Is everything in your house gold-plated," he once asked me, studying my overdraft, "or do you have a gambling problem?"

Sessions with him were like a confrontation with the headmaster, a spell of mental torture which served to remind me what a naughty girl I'd been. But it was, at least, a relationship.

Nowadays the nearest many of us get to management is a stern letter from an anonymous suit at head office when we've drifted into the red.

Like punters in a queue for the supermarket deli, we're summoned to cashiers via an intercom and bossed around by automatons on the net.

This hardly engenders the loyalty banks seem to believe they so richly deserve.

The spectacle of the public lining up to withdraw their savings has been compared to scenes from the film It's A Wonderful Life in which James Stewart persuades investors to save his failing bank.

The collapse was averted because the good folk of Bedford Falls trusted him to secure their savings and respected him enough to save his job.

Rather too late for Northern Rock bosses who are waking up to the reality that, on the respect and trust front, their credit limit is perilously close to mine.

They should be very scared.

http://www.mirror.co.uk/news/column...rupt-lot-run-by-total-bankers-89520-19811500/
 
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